by Broderick Perkins, Realty Times September 17, 2009

Financing the purchase of a home could be the most complex financial decision you’ll ever endure. You need all the help you can get.

To help get you started with the basics, the Federal Reserve offers “5 Tips for Shopping for a Mortgage,” because, well, the fundamentals always apply.

Don’t bite off more than you can chew. Check your budget. You must have a budget so you can estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.

You also have to have enough to save for emergencies. Plan ahead to have enough to afford your monthly mortgage payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.

Shop around. Online and off, shop lenders, brokers, credit unions, government (city, county state) programs, even seller financing. Shopping around is a bear, but it can save you thousands of dollars.

Understand costs. Shopping around means scrutinizing loan costs and fees not just the annual percentage rate (APR) On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate.

Learn risks, benefits of loan options. Mortgages have many features — fixed interest rates, adjustable rates, payment adjustments, interest-only payments, prepayment penalties, balloon payments and more. Consider all the features, including the APR and the settlement costs.

Have your lender calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.

Get advice from those you trust. Ask family, friends, co-workers, professional associates and others you trust for referrals. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development’s (HUD) website or by calling (800) 569-4287